What is the fair market value of my business? Fair market value is generally the price a willing buyer and a willing seller would agree to in an open market, with both sides informed and under no compulsion to act. In practice, the number depends on the valuation date, the rights being valued, and the facts that make the business more or less transferable.
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A practical valuation answer
Fair market value is generally the price a willing buyer and a willing seller would agree to in an open market, with both sides informed and under no compulsion to act. In practice, the number depends on the valuation date, the rights being valued, and the facts that make the business more or less transferable.
For this type of engagement, the analysis usually focuses on normalized earnings and cash flow, customer concentration and transferability, and systems, management depth, and growth story. That is how the answer moves from a generic opinion to a defensible valuation conclusion that fits the facts.
Core valuation checklist
- Confirm the valuation purpose, date, and standard of value before starting.
- Collect the records that matter most: financial statements, tax returns, ownership documents, contracts, and any relevant legal or tax materials.
- Analyze normalized earnings and cash flow, customer concentration and transferability, and systems, management depth, and growth story.
- Document assumptions clearly so the conclusion can be explained to buyers, advisors, counterparties, or the court if needed.
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